THE DAILY EVENING TELKGRAPII-rHILADKLPIITA, MONDAY, DECEMBER ,C, I860. the ouiiiiisrjcir. Tke Annual tteport of Comptroller Hulbilrd The State of Our " National Banks. vy'. " ; ' 'i "i . j i i i . - ' The 'following are tlic material portions of the BBoal report of the Comptrolrr of the Currency, which wu presented to Congress at noon to-day: prnrie or tub Comitkoi.i.kk ok tub cuhkrncy, Wiiin(TON, November 10, h Sir: In complU re with the provisions of section 61 of the national rreney set, I have me honor l present, through yea, to the Congress of the United Slates, the fol lowing report: ..... Since the lant annual report nine national oanks Have bi en organised, of which eight, are new asso ciations, and one a conversion Iroin a . State bank, risking the total nninier organized up to October, 1109, sixteen hundred and ninety-four. I A table exhibiting tho number of banks, with Jthe , iiionnt of Capital, bonds deposited, ami circulation, la each State aud Territory, on the 80th of Septem ber, 1809, will be found on the llrst page of the appendix to this report. iThc material portions are iven below. . . . Notes In Circulation. The following statement exhibits the nnmlwr anil .'"Mount of notes issued, redeemed, and outstanding Bsptcmber Sir, 1869: .Vo. of Sot", Amount. ' ONES. " hmnei . - 9,5S9,ltm ' $.i,!W9.in Hedccin'cd 004,013 904,013 0) Imtstanding .8s,M7 h,6hs,I47-oo Issued8' 3,'209,!N8 ' ,41S,776-O0 Jtedeeinc'd... 232,824 , 404,44S 00 Outstanding 8,9TT,10 ' r,,954,32S-00 flVKH. lMUrj 2.1,676,700 118,3s:i,tj00'00 Jtedeemed 985,940 4,929,700-00 C'lltStanding 22,690,820 . 113,454,100-Ott TFN8. Ittsncd 8,094,645 W,04G,4ftO'0() Redeemed 272,495 '2,724,950-00 COtStaudlng....... 7,821,150 78,'221,5O00O TWENTIES. Issued 2,269,761 45, 395,280 -DO .Redeemed 71,055 1,433, loouo Outstanding 2,198, 109 4:i,902,i80-oo Issned '. 3l.523 18,17fl,150-O0 .Redeemed 22,859 l,442,9WO0 Cotstandlng 8:14,604 16,733,200-00 ONE nCNDRKDH. Issues 274,799 27,479,900 -00 Jteaeemed 25,968 2,696,800-00 Outstanding 248,831 24,883,100-00 XJVE hundreds. : Issued 13,66 6,R34,000'00 Redeemed 2,585 l,'292,5oo-00 otstandlng 11.0S3 8,f5i760(voo ONE TUOVSANDS. Twined 4.769 4,769,ooo-oo Kedceincd 2,415 .4i 5,000-00 Catstandlne 2.354 2,354,000-00 Total amount of all de t nominations ontstand Ing on the 80th day of September, 1869 299,7s9,055-ou Add Tor fragments of notes outstanding, lost, or dcstroyed.por tiong of which have been redeemed .... 840-45 Total , , , , , t"WP,ft;,iwM!i The following statement slt6s the amounts and kinds of United States bunds held by the Treasurer f tho United States to secure the redemption of the circulating notes of national bunks ou the 30th. dsy of September, 1809: Registered bonds, act or June 14, isss $075,000 Kegistercd bond, act of June 22, i860. . . . :ir,0(io .Registered bonds, act of Feb. 8, 1H61 3,491,000 Coupon bonds, act of March 2, 1S01 16,000 Registered bonds, acts of July 17 and Aug. 6, 1861 B,SW,ns0 Iteglstcrcd bonds, act of Feb. 25, 1862 69,22S,S50 Coupon bonds, act of Feb. '2r, 1N02 4,200 Registered bonds, act of March 3, 1863 33,345,900 .Registered bonds, act Of March 3, 1804, 5 per cent 911579,4W Coupon bonds, net of March 8, 1861, 6 per cent 10,000 Registered bonds, act of March 3, 1804, 0 per cent 2,753,500 Tteglstered buuds, act of June 30, 1864.... 35,2l,700 KcglBtered bonds, ucts of Juiy 1, 1862, and July 2, 1864 18,623,000 Registered bonds, act of March 2, lb65, 1st scries 25,465,200 Registered bonds, act or March 3, 1865, '2d series 10,392,800 Jleglstered bonds, act of March 8, 1866, 3d series 2,G73,450 Registered bonds, act of March 3, 1865, 4th series 228,000 Total 1342,475,100 In my report for 1867, 1 called the attention of Con gress to the fact that, in several instances, notes prepared In the usual manner for issue to national banks had been purloined from this otllce. Two amounts larger than the rest were mentioned, to wit : 4500 In nrty and one hundred dollar notes of the National City bank of Lynn, Massachusetts, and 112,000 in titty and one hundred dollar notes or the First National Hank of Jersey City, in addition to which several thefts of a single sheet had occurred, making in all f 17,500. Suspicion at that time was directed to a colored man, who had been employed in the otllce Trom the time of Its organization, in a confidential enpaetty, anil who was then under ar 1 rest. The evidence against him, tiiough very Btrong, was not considered to be conclusive, anl it was thought best not to bring the case to trial at once, but to wait and see what additional testimony might be developed by the lapse of time. During 1 he past year enoi is niacie uy 1110 gumy party 10 avail him self of the stolen notes furnishing conclusive proof of his guilt, he was tried in the criminal court or the District in August last, and convicted, but a motion In arrest of judgment -was granted by the court for sonic defect lii the Indictment, and the criminal was discharged ; lie was at once rearrested on seve ral other charges, aud is now awaiting his trial on new indictments, only about 11400 01 tho stolen notes have been recovered, aud It, is a serious (mestlon whether provision should not be made for the payment or these stolen notes when found in the hands of innocent holders. Their similarity to the genuine issues of the same and other national banks, aud the diillculiy to any but the most expert and skilful in recognizing the forged signa tures, make it impossible, tor the great majority or those who may bundle money to distinguish the spurious trom tho gcuuiuu issues. The subject Is respectfully submitted to tho consideration of Con Kress. ltepoi-ls. ; Under the act of Congress of March S, 19. three reports have been called -for. The first call was made Tuesday, April -20, for a report showing the rondltiouor the banks at the close or business on the previous Saturday, April IT. The second call was made June 15, ror a report allowing the condition of the banks on Saturday, the I2tli of June. The third call was made October 13, for a report showing the condition of the banks on the 9th of that mouth. The first report showed a larger number of banks than usual deficient in their reserve of lawful money, but generally in small am mms. The second and ihii'd reports successively ex hibited an improvement in this respect ; and as they are regarded as set' ing forth the actual working con dition of the banks, without manipulation or prepa ration, the results are far more valuable aud gratify ing. In fact, the two evils most complained of nailer tho former syHtcm or reports, to wit, pre vious preparation 'on the part of the banks, and the opportunity ailorded to speculators to manipulate tho money market, have been almost entirely done away with. The banks habitually keep themselves in better condition, as a rule are less extended, and nave more complete control of their atiairs. If rtiey carry out this polity a little more thoroughly they will lie less at the mercy of tho borrowers, will be better able to protect the legitimate Interests of their fustomers, and better entitled to the fostering care 41 f the tiovernniciit. Utiuldatlou. As the law now stands, a bank may, by a vote of the shareholders owning two-thirds of its stock, go into 'liquidation and close up its affairs. After the expiration of one year from the pabllcation of notice to its bill-holders aud creditors, as required by the statute, it may deposit with the Treasurer of the United States legal-tender notes for its outstanding circulation, and take up the bonds eld as security therefor. This section was undoubtedly intended to provide for the winding up of banks under the ordinary con AJUVUS Incident U) specie payments. The natural flow of no'es to the plnce of their lmo, when banks sre laying specie, would cause a lara portion of , them to tie redeemed during the year; and If the ' I'Btik is snivel, t, mid in gooti faiih endeavoring to 1 close up Its HUslis, the must of Its creditors would roblily be paid ty t!i explrstton or thst period. ; tso that, mipposii t tne MqnMstinn to have progressed I so fur that the bank is ready to distribute .its capital HiiiiiiiH ns sii.cMioKici'N, tiie law proviucs mi) man ner in which tin liquidation shall lie completed, anil the iPhareholdi r discliai yod from all further liability on Si count of its circulating nobis, within a reason able time. ' It to respectfully recommended that Congress should puss u act In one section, uncou nested with anyoHicr subject, requiring sll banks that go in liquidation to ncposlt legal-tender notes for their outstanding. .circulation, and take up their bonds deposited with the Treasurer 01 the United States IIS securit.r ffir m-h lr..uintlnii. within Hlxtvdavs 4 from Hie tint of ttie vote of the shareholders to go into iiqiiKiatlon. 'Method ofCollrrllnK United Hint taxes. Section 41 of the national banking law provides for tsxlng the circulation, deposits, and capital not In vested In I'nlted States bowls, of national hanks. The banks are required to report and pay these taxes semi-annually to '.he Trcasnrer or the United States. 'This they bave done regularly since their organic tlon, paying the Tressury several millions every year, without trouble, and without expense to the Gov ernment. I nner the Internal revenne law thy aro required to pay a special tax, anil a dividend tax to the collec tors of the several districts In which they are located. It is recommended that all taxes imposed on na tional banks by the I 'nlted Males he made ret urnable iiin' payable to the Treasurer of the I'nltsd States, In the same manner that the larger portion of them now are. - This change would avoid confusion, save expense and trouble, collect tho taxes more promptly, and probably more thoroughly, and place tho whole business under the supervision of one oillcer, by which means, also; all Information on the subject would be concentrated in one otllce, and so be more accessible. 1 Sound Currency. The currency constitutes a very Important part of the financial syteru of any country. Without a sound currency, a healthy financial condition is impossible. There are two requisites to a sound currency con vertibility and elasticity and cither of the two in volves the other. The present currency or tho Vnitcd States possesses neither of these requisites. During the past year it has neither Increased nor diminished, but, stands about as it did this time last jear t390,000,ooo issued by the Government and t300,0oo,000 issued by the busks neither redeemable nor convertible into anything more valuable, and therefore not susceptible of reduction by any ordi nary process; each issued to the full limit allowed by law, with no power of expansion. The whole amount Biust be employed, whether It is wanted or not, and the limit cannot be exceeded, no matter now urgently more may be re quired, liurlng the summer mouths, when there is rest In almost all branches of trade, the whole circu lation was in market seeking employment; and now that autumn has come, with its h-.uiuteous harvests, when the farmer seeks to realize in money there ward or his labor and the interest of his capital for the whole year, when hundreds of millions roust be distributed throughout the length and breadth of tho land, we have the same' unvarying amount of cur rency to use. There are two kinds or currency in use: one issued directly by the Government; the other issued by the banks. One kind would seem to be enough. The best should be preserved aud perfected ; the other withdrawn. Applying the test first to the Government Issues, it is noted at once Hint they are not redeemable, and that no provision has ever been made for that pur pose. The very moment they are made redeemable, they will cease to answer the purposes of currency; for, after they arc redeemed, they are In the treasury and cannot again tie paid out, except upon appro priations made by law, in accordance with the con stitutional provision, and consequently cannot again be put in circulation, except as disbursements may be necessary to pay expenses and debts of tho Gov ernment. So that Government circulation is not convertible, and therefore is not clas'.le, and cannot be made so w ithout first making a radical change in the organization of the United States treasury, by which it should be converted into a huge banking institution calculated to receive deposits, make loans, and otherwise perform the functions of a national bank. The notes issued. b national banks arc noihinally redeemable; and, if the leul-teiider notes were out of the way, would be actually so, and being Issued by institutions in sympathy with trade, would con tract and expand in oocdlence to the law of supply and demand, so that they would also possess the element of elasticity. As to the comparative merits of the two kinds of currency, an impartial consideration would probably decide in favor of a bank circulation, principally because it would pos sess tlie power of adapting Itself to the exigencies of trade. If Government issues could be made to possess the same power of adaptation, the verdict would be In their favor. A candid investiga tion, however, cannot fall to develop the fact that there Is no branch of the fiscal sesvice adequate to the direct issue and care of such a enrrency as the country requires. The treasury system is so arbi trary in its collections and disbursements, so little In harmony with the business interests of the com munity, that it frequently absorbs large amounts or currency at most inopportune seasons, and dis burses them witli just as little regard to the wants of trade. If the Treasury were redeeming Its Issues, large amounts would lie presented lor payment when money was plenty; but, as the return or this money to the channels tr trade would depend upon the disbursements or t lie . Government, there could be no certainty that it would find its way buck again when needed. In fact, the current operations of the Treasury of the United States are regarded by business men us constituting a powerful, aud at the same time a very uncertain element, dilllcult to estimate, but which must necessarily be taken into consideration in all their business transactions. It is but justice, however, to say that the Inconveniences and defects inherent in the present system have been obviated as far as possible by the present administration of the department, and where they could not be obvi ated entirely, they have been reduced to a mini mum. So long, therefore, as the collection of the revenues is liable to be a process of lutlation, the agencies through which collections and disbursements are effected cannot be regarded as suitable agcucies for furnishing a sound currency to the people. The argument that the Government should furnish the currency in order that it may realize the profit upon its circulation is a common one, but will not bear scrutiny. There is no profit to the Government on the circulation of an inferior currency. Only a sound currency will promote tho material prosperity of the people; and the Government can realizo no prollt from anything detrimental to their Interests. As a currency, therefore, Government issues are not profitable. As a loan without Interest they are equally unprofltabh'.beeause they are lnjtirioui tothe national credit, and udd enormously to the expenses or the Government. ir, however, it is Impossible for the Government to comply with the conditions necessary in order to furnish a sound currency, it can at least provide for the withdrawal of its own notes, and prescribe the conditions upon which, and the agencies through which, a better currency may be provided. As before stated, there should be but one paper cuirency in the country, and that should emanate from a source that is lntlueaced by and is amenable to the laws of trade. No check or limitation should tie imposed upon it other than the law of supply and demand. Free Bunking. The banking system now in operation under the act of Congress is doubtless an improvement upon the condition of tilings that prevailed prior to its in auguration. It may have imperfectiyus, but most of tlicm can be traced to the evils of an irredeemable currency. Abuses of various kinds are practised, or tolerated, dnriug a suspension of specie payments, that would disappear of themselves In a healthier llnuncial atmosphere; and as observation and experi ence bring to light defects, they may be corrected by judicious legislation. Any radical changes now would airect so many and such great interests, that It would be safer and wiser to build upon and Im prove the present system, so as to bring it fully up to the requirements of the age and tho country, than to undertake to build up a now one. It mav bo made tho means of supplying a safe, convertible, aud elastic cuiTcncy in any volume that may be required by the business of the country. No human intelligence can tlx the amount of cur rency that is really needed, for it is continually vary ing and is never fixed. If Congress limits the amount, there will always bo tliote who will be dis satisfied, aud who will seek legislation either for the purposes or contraction or expansion. Aud so long as the volume of currency depends upon legislative enactment, uncertainty and instability will peryado all financial operations. The entire South and many portions or the West are very much in need or the facilities and advan tages to be derived from properly organized banking institutions, aud their neceucities would justify them in deliberately adopting measures to supply their wants, the direct tendency of which would lie to hasten the return of specie payments in the manner inuieatcu, 10 wu, uy mo increase 01 oank notes ami the absorption of the legal-tender notes. As the former increased, the latter would diminish. As lawful money became scarce, Its value would lie enhanced, aud would gradually approximate to par with gold. Thus snecle payments niay be reached through, tho agency of the national bunks, and by the operation of natural causes. The process will not be rapid or spasmodic, because it will, in all its stages and in all its details, be governed bv sound principles and conform to established laws. At the same time, the benefits And advantages of tue national bunking system wonld ffrsdnslty become more equally dlfTnserl, nnftl all sections would at length gel. their Just and equal shore, apportioned beyond cavil or objection, be cause regulated by the actual requirements of busi ness. 1 While free banking may thus be established with safety, antetlnr to specie payments, conditioned only upon tho withdrawal and cancellation of a legal tender dollar for every dollar of hank currency Issued, free banking upon a specie basis may also tie permuted, with equal nafety and without delay. With li tails properly adjusted, banks may lie cstab. llslied with authority to issue aud put in circulation gold notes limiting the amount only by the ability or the banks to comply with the necessary conditions, aud to redeem their issnes. Some provision or this kind is probably necessary in order to supply the Taeuio and gold-producing States Willi" a paper currency. A circulating medium, cheaper and more convenient than coin, has long been a necessity In those States, and would un doubtedly do much to promote activity, enterprise, and development. Experience lias demonstrated to them that a currency composed exclusively of specie Is not exempt from the fluctuations to which money and trsde everywhere are snbjcet, and has awakened an anxiety on the subject which may lead to the introduction 0 paper money, if the opportu nity Is aflorded. - , Uy the establishment, of tanks on a specie basis, the restimption of specie payments is only antici pated ; and familiarity with gold values will do much to relieve the subject of the mystery with which it Is assoiiuteil In the minds or many. Looking forward to the day when uniform values shall again prevail, it nuiy be that, by wise legislation now, a banking system can be established, truly national In Its eluiracter and scope, which will furnish a sound cur rency or uniform value 111 evury State of the Union. Respectfully submitted. - ' "'" Iltl.ANO R. lltU.m'RI), Comptroller of the Currency lion. GEOnnK S. TtorTWKi.i.. Secretary or tho Treasury. The following statement shows the number of banks, amount of capital, aud circulation in each state and Territory, on the 80th of September. 3869: r -.2 STATES ANb TlRKI- f'apitul paid In ac.tuid cir- TOKlkS. 111. euiatton. Hiilre New Hampshire.. Vermont Massachusetts.... Rhode Island Connecticut ...... New York New Jersey Pennsylvania Maryland Delaware District Columbia. Virginia West Virginia Ohio Indiana Illinois Michigan Wisconsin Iowa. Minnesota. KansaB Missouri Kentucky Tennessee Louisiana Mississippi Nebraska Colorado 61 41 40 206 f'.l,185,0O01K) 4,S35,0001KJ 6,810,012-50 85,OS'2,000-00 20,804,800 110 24,6U6.8'20-00 1)6,284,941 HO 11, 565, 350 DO 50, '235, 390 110 12,71!0,202 50 17, 509, 196 DO 4,281,195110 5,751,720110 87,0411,930-00 12,486,9001KI 17,433,978 00 68,553, 17ft1K) 9,407,116-00 88,74H,600D0 8,91O,KH0D0 1,197,625110 1,099,571-00 2,134.980,00 1,98ft, 050 DO 1S,405,3N5D0 11.017,627110 9,980,878111) 8,824, 755D0 2,50S,10'2DO 3,217,0771H) 1,548,900-00 341,0001)0 4,164,525110 2,366, 720 DO 1,191,651 DO 1,004,589-00 53,3831)0 170,000-10 252.000 DO 1,234,100110 379,700 DO 192,5001)0 '2SH,647D0 129, 700 DO 8,500-00 407,535 DO 178,900-00 i:i5,000D() 86,000 DO 63,500 00 8-40 6'2i 811 294! 54 197 81 11 4 17 14 132 6-8 ,4'28,185-00 1,350,000-00 2,623,300-00 2, '216,400 -00 22.954,700 DO l'2,90'2,(KI0'O0 12,570,00 H) 5,460,010D6 2,T0,0O0-IM1 4,01 7,000 DO 1,8-10,000 DO 400,000-00 7.810,.'0O1IO 2,885,0001)0 2,015,300-00i 1,300,0001X1 Vrio.otKiiio 350,000110 1,600,000 DO N23,400D0 823.500110 84 41 34 13 17 6 18 16 13 2 (ieorgla ' North Carolina. . . . j South Carolina..... I A labs ma. ! Nevada I Oregon Texas ' Arkansas 1 I'tan Montana. Idaho ; Fractional redemp-i tions 1 4HI,0IMI1I0 250,0001)0 100,000 DO .'i25,0OODO 200,000 DO 150.000 DO 100,000 do! 100,000 do! Total . . . . 1620 1132,163,61 1 DO 1299,789,895-45 74 banks were at that date closed or closing, In ad dition to the above. WAR, Annual Report of Secretary Belknap -The Operations of the Year The Present Status of the Department The Ex penditures. The following are tho most material portions of the first annual report of General William M. Belk nap, Secretary of War, which was sent to Congress at noon to-day: War Departmekt, WAsniwiTON Citv, November 20, 1869 After the consolidation made in accord ance with the act of March 3, 1869, there remained, on November 1, 509 unattached otllcers. All of these bave been assigned to duty excepting 156, who are "awaiting orders." It ssems equitable and just, should a reduction be made, that officers awaiting orders by their own reqnest, and preferring that to active duty, should have less claim for retention than those who applied for assignment. Of this class there are 139 otllcers. Some of them, however, had special reasons for asking to be placed on the "awaiting orders'' list, which the department recog nized, and which should lie regarded. It Is certainly fair that the consequences of reduc tion of otllcers should fall proportionately on cavalry, artillery, and Infantry, and, should Congress act in the matter, It is proper that this consideration should not be overlooked. In reference to the question of reduction, I concur with the report in recommending that authority be given to retire a greater number of oDlcers for cause than Is now allowed by law 7 per cent ol the otllcers of the whole army. The present maximum of the army is 62,'234 en listed men. Kelying on two-thirds for actual ser vice, the number of men is 84,822. By the plan of organization submitted in the report there would be 42,650 men. Two-thirds for actual service would be 29,750 men, below which it would not be prudent to go, as the necessities of the country and the great extent of territory to be protected will require every man of that number. Iturean or military Justice. The Judge Advocate-General reports the number of records of military courts received, reviewed, aud registered, to be 14,941 ; number of special reports n ude, 1352. This bureau, in addition to its regular duties, has been charged with the duty of systemati cally arranging and indexing tun important state papers belonging to the oillces ot the late Colonel L. C. Turner, judge advocate, and Brigadier-General U C. linker, piovost marshal, and the work is steadily progressing. Lists ure ulso being prepared of the lines and forfeitures Imposed by military courts, and of eases or remission of the same. Ouarlf riuuHter's Deimrlineni. The expenses cf the (uartennnster's Department during the fiscal year ending Juue 30, imI'.i, were f21.968,4.s4D8, a reduction of fourteen and a hair millions below those of the preceding fiscal year. In February, 109, the number of civilians hired by tills di partmcnt exceeded ten thousand, which has since been reduced to four thousand. Five hundred line ofllcers have done duty in the (quartermaster's iiepaiiiueui, 111 iiuoiiion 10 1 no otllcers 01 uiai en a- blishment, eighty-four in number. The report states that the clerical force of this ofllee has been reduced so low by late legislation as to seriously retard the public business, utnl to provide for the set'kinent of accounts, some increase in Hie force is necessary. A building capable of accommodating all the bu reaus of the War Department, lire-proof and secure, is much needed. Military records of great value ure exposed to destruction, and are so scattered .as r. Impede und delay the public business. The monthly rental of buildings in Washington and lots occupied by buildings owned by the l ulted States amounted to 1 4264 '19, being a yearly retital or j,'.o,954-2h. The railway companies, to which the military rail road material or the (quartermaster's Department was sold on credit at the end or the war, Incurred a debt originally of f 7,591. 406. Interest has increased tills amount to ij9,ooo,ooo, about one-half of which has been paid ; but some railroads being in delimit and showing no disposition to meet their obligations, suit has been lately ordered to be brought ugaiunt them. liut few vessels have been owned by this depart- I nient during the year. I The railroads of the country, bavins declined to adhere to the war rates of transportation, have been paid during the fiscal year upon their gcueral tariffs, with a classification of military supplies settled in conference at a convention of general freight agents. There have been paid for water transporta tion during the year f 1,424, '222-b'J, and for railroad transportation '2,1253,804'80. of this 1 amount 1933,166-tl was paid to the I'aclilo railroads, one-half being paid in cash, and the other half retained in the Treasury to meet the interest on the bonds guaranteed by the United Htatea During the year a, 000 persons, 8700 animals, and 62,000 tons of stores have been moved by water, and 60,000 per sons, 14,000 animals, and 40,000 tons of stores by rail road. 117,000 tons of stores nave been moved by con tractors for wagon transportation. The i'aclilo Itail road baa occupied some of the principal routes of fvrmer wagon transportation, avud bus saved the Government much money in snpplylng the posts along lis iinr. iy nrraiiKFiuent bet ween the Department of War and tho Interior, suppllpn for tho Indian service aro now transported by the (quartermaster's Department on routes in the Indian Territory tho ac.tusl rrmt, under the contrsets, belnir refunded to the War De partment out of the appropriation of f,oon,ooo for pac illeatlon of Indians, granted April 10, 189. Although the amount of clothing and equipage oft band at the end of the war 1ms been reduced by sales and issues, there still remains a stock valued at over t42,SNi,isjo. HiiboUtenre Department. Subsistence supplies for the army have been mainly procured In the lrR-o market cities of the country. The average cost of the ration at theso markets has been about twenty-three cents. Efforts to procure salt, meats on the Facltlc coast for troops stationed there have met with great success, sup piles of excellent quality having been obtained at favorable prices. .Tobacco, at an average monthly value of $I9,ishi. has been furnished t trisms at cost prices, and the Kreedinen's Hurenu has been supplied with stores to the value of nearly f 250,0m), most of which has already been paid for, and tho remainder Is in process of refunding at the Treasury. Medical Dcpnrtinmt. The current expenditures of the Medical Depart ment during tlio fiscal year ending June 30, lsoo, were $283,561 -21 ; the total expenditure of that de partment, including "WBr debts'' and "rernnd ments," was 1708,805-36, and the available balance on hand at the close or the year was $1,792,050-78. The health of the troops has been good. Vellow fever has appeared at Key West only, and at this point there were forty-three cases and twenty-one deal lis; but by the prompt removal of the troops to new station the ravages of the disease were at once stopped. The total number of cases on the sick list during the year was 104,235. The averago numiier constantly on sick report was 2367, or about 6-5 per cent. The number or deaths was 648, of dis charges for disability, liss The number of commissioned medical officers for dnty on June 30, 1809, was 161, being an average of one medical oflleer to 204 men. The numiier of posts was '239, besides detachments and outposts. There are now two vacancies of surgeons and forty two of assistant surgeons In the medical corps. The experience of the past three years has shown that the present organization of the medical stair Is satisfactory; hut that, even were all the vacancies in it tilled, It would still be barely adequate to the demands made upon it. Tar Department. The raymaster-Gcncral presents the following summary exhibit: Balance in hands of paymasters at the be ginning of the fiscal year July 1, 186a.. $5,931,878 Received from the Treasury during the fiscal year.. 36,245,000 Received by paymasters from other sources, exclusive of sums transferred among themselves 238,192 Total to be accounted for $42,464,770 Accounted for as follows: Disbursements to the regular array $18,678,251 Disbursements to the Military Academy. . . ls5,259 Disbursements to volunteers diack pay and bounties) 19,918,636 Total olsbursements. $38, 782,145 Amount refunded to Treasury 48,943 Balance in hands or paymasters June 30, 1M'9 , 3,033,077 Total $42, 411,770 Congress, by an act approved March 3, 1869, au thorized aud directed the transfer, from this olllce to the Second Auoltor of the Treasury, of all addi tional bounty claims pending and unsettled oil the first day of May following. After that transfer was accomplished, it became practicable to dispense with the services of additional paymasters, and they were accordingly honorably discharged. There remain now in service only the sixty regular paymasters authorized by the act for the reorganization of the army, passed July '28, i860. This force cannot with safety be subjected to much reduction while the number or military stations shall remain as at pre sent, Tho Paymaster-General states that he is confirmed in the opinion that no system can be devised which, equal to the present one, can be made to combine the advantages or prompt payment to the troops, the safety of the public money, an accurate and imme diate accountability, with the slightest rsslble lia bility to embezzlement or defalcation, and with the least cost to the Government. 1 he disbursements for reconstruction purposes are $2,013,293-46, and the balances in hands or paymasters October 2, ?69, are $110,643-79. In accordance with the requirements of law, all claims for the additional bounties granted by the act or July 28, remaining in tiie l'aymaster-Ueiieral's otllce unsettled on the 1st of May last, were trans ferred to the Second Auditor of tho Treasury for set tlement. Of the total 'number 441,959 received, there were examined and settled by the Pay Depart ment 440,008, leaving for transfer to the Auditor but 1351 cases, of which the major part had been ex amined and determined but not yet paid, for want of receipted vouchers from the claimants. T he total amount disbursed by the l'uy Depart ment for additional bounties, Including those settled by the Second Auditor and paid by the department on Treasury certificates, rroiu the beginning tothe 80lh June last, is $57,220,150. lOnulneer Department. The report of the Chief or Engineers gives a de tailed account of the operations of the Engineer De partment, aud of the means required to execute the duties devolved upon it. The otllcers of tho Corps of .Engineers, aided by details from other arms of tho service and a number or civil engineers, have been encaged upon tho permanent national dorenses, survey or tho lakes, river aud harbor improvements, explorations and surveys, command and Instruction of engineer troops, and in charge of public bcildings, grounds, and works in the District of Columbia. Twenty-two otllcers of the corps have been doing duty in the several military divisions, departments, and districts, in the llgliUiiouso establishment, and as instructors at the Military Academy. Work has been continued on the permanent de fenses to the extent permitted by f lie small balances remaining of old appropriations. These have been ex hausted for the most part during the year, and the works have consequently been closed up. Ordnance Department. The fiscal affairs of the Ordnance Department during the year ending June 30, 1869, were as fol lows: 1 Amount available from all source $18,283,61S Expenditures since June 30, 1868 B,787,!i-25 Turned into surplus fund 1,000,000 In Treasury, not credited to approprla- I tlouB 701,752 In depositaries, to credit of disbursing of- 1 ficerB, June 30, 1869 425,529 iu Ait-umuj u u 11 j o't iou; ia,a3t llo The expenditures or the department during the year Included over $500,000 tor war claims, aud about $32,000 ror cartridges made for the Navy Department aud not yet paid lor. 1'ree dinen'it Ilnrenu. The operations of this bureau have been closed, except tho educational and bounty divisions, ami two hospitals for freedmeii. The number of oilieors, agents, and clerks has been reduced from nine hun dred and one to one hundred and fifty-eight. No further reduction is practicable so long as the present operations shall continue. The bureau bus had under its enre, up to June .",:, 1869, 584,178 persons. All the hospitals but two have now been closed or transferred to the civil authori ties, aud one of the remaining two Is about beiug closed. There will then remain but one, which is locuted in the District of Columbia, and cannot be dispensed with at. present. The general average during the whole period of the existence 01 the bureau shows that about one in two hundred, or one-half of one per cent., of the freed people have been supported by the Govern ment, The frecdmeu were advised to make written con tracts with their employers, und have the same ex plained and approved by a bureau oiilcer. In a single Mute mote than fifty thousand such contracts were made. The labor of the reodmeu has produced nearly oil tho food consumed In the South, besides largo amounts of rice, sugar, and tobacco for exportation, and about two million bales of cotton per year, ou which were puid into the I'nlted States Treasury, during the years 1S66 and 1S67, tuxes amounting to more than forty millions of dollars. Much disappointment und ill-feeling were caused by the luiltire of the original plan to lease or sell the abandoned lauds in sinull tracts to refugeos ami freetlmen. Information hus been published respect ing lands under the homestead act ot June '21, 1866, and some aid given to those who desired to enter them. Attention is beginning to turn iu that direc tion, aud about four thousand fuiullb's have already made entries and obtained homes of their own. iu a rew instances freedmen have uulted in tho pur chase or farms under cultivation. They are very anxious to become land owners, and the possession or lands and homes is one or the chief means of tlieli elevation. But the most urgent want is education, an, more attention has been paid to this than to any other subject. In eucli State at least one normal school has been organized. Several ehurtered colleges for freed people are in operation ; also a university, in tho District of Columbia. In the 2118 schools under the care of the bureau, and ofilclally reported, the number of teachers em ployed Is '2455, and the number of pupils is 114,622. Adding those estimated in private aud Sabbath schools, the numiier under instruction of some kind during the last year is not less than 250.000. The freed people are doing what tbey can for their own education, having, during the last year, paid for tuitlou and the construction of hnlldimrs about $200,000. A . The whole mount of bounties paid since April 17, .ism. when the first Treasury certificate was recetveil, Is $n,fl.H,4l8t-9. The balanco on deposit now duo to e.i m man ts Is $1,wo,n66-6-J. Three thousand three hundred and eleven applications for bounty are now ntider exsminntion iu this otllce, and 1s,roo such claims arc now on flic in tho Second Auditor's ottlco awaiting settlement, and it is believed that alwut 26.000 claims of this kind remain to be preseutcd. The work or paying bonntles is therefore not yet complete, and it is is llcvcd that the lystem now m eperatlon should be continued. The rreedmcn have been protected as far as possi ble from injustice. Tho means adopted have len conformed to the wants of different communities. The expenses of tho bureau were met the Urst year with the proceeds of rents, sales of crops, school Mutes and tuition, and the sale of "Confederate States property. The amount received from all these miscellaneous sources was $1,865,648-80, and from appropriations by congress since Julv, 1866, 111,084,750, making a total of $l'i,950,395-80 received from all sources. The expenditures, including tne accounts of the "Department of Negro AlfairB," from i,".T,.',.JoJt'.,' ,0 Au8ast 81, 1869, have been In addition to this, subsistence, medical supplies, snd quartermaster supplies, were expended, amounting in cash to $2,;i;io,7ss-72, tint whose real value when transferred to the bureau was probably less than one million of dollars. Adding their origi nal cost to the cash expended, the total expenses of the bureau have been $13, 624,816 -82. Attention is cnlled to tho recommendation of tho report that the hospital in this district be continued, snd that the payment of bounties tie continued, by this or some other agency, until all should have a reasonable time to present their claims. Appropriations, Kxrcndlmre, and EHtlniatcs. There was carried to the surplus fund June 80, 1869, the sum of $58,2'0-175 The actual expenditures for the liscal year ending June 30, isi!, were (including the Freedmen 's Bureau) $56,761,732 To which must be added, for old war debts, the sum of $23,8S2,811 Making the total expenditures $80,644,048 Of the shove there was expended for recon- Ktriiction purposes $406,420 There was appropriated for the service of the War Department for the fiscal year ending June 30, 1870 37,538,868 The estimated deficiencies ure 2,940,000 The total estimate of military appropria tions for the year ending Juue 30, 1871, is 34.631,031 In the foregoing estimate tho amounts origlually presented by the heads of bureaus have been mate rially reduced, and any appropriation smaller In amount than that asked ror would full to meet the necessary wants of the department. The following estimates are submitted separately, and arc given for the consideration of Congress, as presented by the Chief or Engineers: For fortifications $4,196 400 For rivers and harbors 7,901,900 Tofal '. $12.ltrt,300 As to flie fortifications, I urge the appropriations asked for the forts near the larger cities named in the report of the General of the army, to wit: Port land, Boston, New York, Philadelphia, New Orleans, and San Francisco, The amount required ror public buildings and grounds and Washington aqueduct, as estimated by the oflleer in charge, Is.. $1,021,352 Which has been reduced, in the estimate presented herewith, to. 498,070 THE WAVY. Report of Secretary Robeson The Operations of the Year and Present Status of Our Navy. The following are the most material portions of the annnal report of General George M. Kobeson, Secretary of the Navy, which was transmitted to Congress at noon to-day: The head of this department hag been twlco changed since the sending In of the last annual re port, and the report for this year must therefore in clude the operations carried on during that time, as well under the superintendence of Mr. Welles (the former Secretary of the Navy), as under that of my immediate predecessor, Mr. Bono, and myself. Of the period extending from tne date of tho last annual report to the coming in of the present admin istration, the detailed reports of the several bureaus are naturally incomplete, and I am, of course, with out authoritative information of the ideas which at that time governed the operations of the department. It becomes me, therefore, to speak of it only in general terms, and, showing simply tho condition of the navy at the commencement of this administra tion, Btate only results as the surest test of princi ples and practice. Naval Force In March, ISO!). When my immediate predecessor came into olllce, on the 9th day of March last, the Navy of the I'nlted Stales consisted of two hundred and three (203) ves sels of all classes, and in every condition. These measured one hundred and eighty-three thousand four hundred and forty-two (183,442) tons, and were calculated to carry, wiien in commission, thirteen hundred and sixty-six (1366) guns, exclu sive of howitzers. Of these ships one hundred and fifty-one (15t) were wooden, aud fifty-two were iron-clad or monitors. of the wooden ships thirty-two 32) were sailing vessels; fifty-three (63) were steamers, with some auxiliary sail power; forty-four (44) were steamers, without any elllcient sull power; and twenty-two (22) were without sail power of any kind. The lron-clads are all steamers., relying wholly on steam under all circumstances. Inudeimacv of Force. It is apparent that these means were utterly in adequate to the ends to be attained, and that our small fleet on these stations, consisting of forty-three (43) vessels, mounting three hundred and lifty-six (356) guns, with a tonnage of forty thousand and lilty-two (40,052) tons, was too small in number, aud too weak iu character, force, and condition to per form tho service required by the ideas of the Gov ernment ami the expectations of our people. Cruis ing on the same seas and with duties not moro various and extended, France has over one hundred and IJIty (160) ships in commission, of a tonnage of 250,000 tons ; while England lias, crowded into the same area, no less than one hundred and ninety-one (191) ships, with a tonnuge of 32s,o00 tons, with her flying tquadrou ready to reinforce her power when ever occasion may require. The fleets of other nations rival, and some surpass ours in their number, size, and cliai-aiiter; and In lact, our position ou the seas wss maintained only by the spirited and untiring energy of our otllcers, aud a pervading belief In the latent resources of our country ai.il the energies of our people. What has Mnce bren Done. With such material in this condition, the depart ment, at the commencement of the administration, found itself charged with the ltity or maintaining the naval power of the Government in every part of the world ; required to protect, 011 every sea, (lie In terests of the dominant and responsible nation of tho Western Continent, whose boundaries stretch to tho shores of either ocean, whose people aspire to rival those of the whole world in every field of enterprlso, und whose Government Is pledged to the Interests of freedom, civilization, and progress; aud at the same time to be pr, pared with reserved power and the means of applying it, available in every emergency for defause and aggression. The result has already been a large saving. Seve ral of our most eilcctlve cruisers have consumed no coal for months. It can lie shown by figures that this system Of giving und requiring the general use of full ssll power, betides its ellect to make sailors or both rtlicers and men, will, ou the vessels In tended to lie kept In commission (calculating that lliey cruise but two-thirds ot the time), make, in the item of coal alone, as consumed under the old sys tern, a saving of mure than two millions of dollars per annum. Our monitors snd Iron-dads were also placed in the huuds of the mechanics, and put In thorough repair. Four of the largest have gone into commis sion, as part ot our available cruising force, aud the rest are kept, at small expense, in complete order, so that the w holo fleet can be ready for service iu a week's time. or course so much work could not be done without considerable expenditure or money, but by close economy, and aBjsiem or strict accountability, the sum of this expenditure has, up to the present time, been kept considerably below the amuuut of the ex penses or the department for the same period of the last year. Since the 1st of March, 1869, no less than eighty (80) vessels of every class have been repaired or altered, or put in process of repair at the various navy yards, yet the books of tho Treasury will show a dccrcHse iu the expenditures of tho department lor that time, as compared with the corresponding period of lsfis, of threo million five hundred and twenty-one thousand eight hun Jred and twenty-two dollars and ninety-two cents ($3,621, 822-92). Tho statement hereto annexed, entitled "Kxhitjlt of ex penditure," will show the ships repaired, and the monthly expenditure of the department The Present Force and It Employment on the Vurluua Hlulluun. The North Atlantic Squadron now consists of the Powhatan, Tuscarora,. Severn, Albany, Nantasket, Nipslc, Seminole, Swutsra, aud the tugs Speedwell sad Staudish, together with two heavy lrou-clads, tli Saugus and Dlelaior, twelve (12) vessels. Inclu ding tugn, aud mounting In all seventy-six (76) guns. It is commanded by Itear-Adiuiral Charles Jl. poor, who relieved 'near-Admiral Uofl on the 16th flat tl September last. , t r--)( ( - r ; The Pacific fleet, under command 01 Rcar-Adra!rl Turner, with Commodore William Kodgers Taylor, and Commodore 1). MoDougal, commanding tha re spective sqnadrons, consl.t now of fourteen (14) vessels, the Kearsarge, Lackawanna, Oaslpee, Mo nlhloan. Kesaoa, Cyane, Jamestown, Saginaw, Da eotah, Saranse, Nyack, Onward, and the Gnerrlere (refitting), with the Pensacola as flagship, monntlni in an one nnnorea ana twenty -nine guns. Of these j llin tn Mm lfiat-namnrl hava KAAn r ..... 1 . -. - 1 - "--" 11 vi ure uciiur mu- ronghly repaired and altered In the manner herein before mentioned, and the fleet, though smaller liti nnmner, Is already much more effective for the duties of that station. Too European Squadron, under command of Rear Admiral hadford, has been reinforced by the Juniata and Supply, and the Sabine has been attached to It tor the present; it consists now of these vessels, wlih the Klchmond ami Plymouth, and the Franklin as flag-ship six (0) vessels, mounting one hundred and f ix (106) guns. This Is, of course, but a small force for a station so consplouous and lmiKrtant, but we have not been ahlo further to Increase itT As soon as tho resources of the department will permit, this iquadron should lie largely strengthened. ""A"1 Squadron consists of the Piscataqua (nag-ship), Oneida, Monocacy, Iroquois, Aslinelot, I niidilla, and Maunice: and tne Beuicia, Colorado, and Alaska arc also fitting out for that station, making In all ten (10) ships, mounting sevnntv-two (72) guns. It is couunauded by liear-Adinlral Ste phen C. llowan. I recret to ihv that tn these ships hsve been condemned as entirely nnsea worthy, unfit tor crulslnir. exceut In riv..r u,i .. Fafe to be sent to the I mled Slates ; and. as there fa 110 opportunity of repairing them in those waters, tha Admiral In cemmaud has recommended that tlicvbe sold on the station. The department has, therefore, directed that, when It shnll be no longer possible to use them with safety, their armament and stores be removed and sent home, and tlie vessels themselves sold to the best advantage. This order "has alrcad, been carried out in the case of the Aroostook; which was also condemned. Home Defense. But the subject cf pretention to our commerce and influeuce on lorelK-n sous by no means comprehends all that the department reels called upon to renre sent in connection with the questiou of the size and character of our navy. The matter of national defense is still more im portant, and comes home as closely to the interest and the pride of the whole people. Any comprehen sive plsn of a naval establishment must, include sonic practical provision for the defense of the nu merous seaports scattered along our coast, and the great rivers aud bus, on whose shores are concen wealth 80 D1UCh ' tUe ntttloual nd Individual Our monitors havo been already alluded to aa a ready and effective means of harbor defense, and this they will doubtless be, to the extent and num ber or their capacity. But, unless, completely and certainly invulnerable, they are comparatively use less, and we must therefore keep pace with the late improvements in ordnance. Most of them are canai tile of bearing the additional armor necessary to give the strength required, but this will, of course require a new and considerable outlay. ' Torpedo Corps. Another comparatively inexpensive but most eftcctlve means of defense has not escaped tha attention of the department. I refer to the sub marine torpedo. The terrible destructive power of this instrument was shown during the late war Since that time considerable attention has been given to this subject by oiilcers of the navy, particu larly by those stationed at the Naval Academy Shortly after my appointment as head or the de partment, a torpedo corps was established under the Hurcau of Ordnance to make experiments, taka charge of the apparatus, and perfect a system for the application of this means of defense to our coasts and harbors. This is, of course, not a subject for public Illus tration, hut enough experiments have already been made to show how valuablo, as well as terrible. Is this raeaus of defense; and to convince all havintr knowledge of it that when it shall have been fur ther perfected, and Its use systematized, the torpedo will be one of the most eifcctlvo weapons of marine warfare. To iusure safety and success in their use under every condition requires a knowledge of the scientitlc principles applicable to their construction and use, with an intimate acquaintance with the localities to be defended. The torpedo corps has therefore been selected with care, aud the experi ments are conducted under the supervision of an officer of scientific ability. As goon as a torpedo is constructed, and the particular locality and manner of Its use determined, it can be stowed away as an inexpensive but most effective weapon of war. This means of defense, properly applied in con junction with a system of harbor obstructions, backed by monitors, and supported by tho frtrts anil water batteries which command the narrow en trances to our principal haroors, would defy anj power which could cross the ocean to attack them. These localities have been the subject of careful inspection by both branches of the military service, and both are thus prepared with the knowledge which only actual Inspection can give. I commend this subject through you to the atten tion of Congress, and I trust they will afford the means to pursue und perfect the system. in the paper herewith transmitted, entitled "Plan of Naval Establishment in Time or Peace," will be found a detailed statement of what Ir believed to be tlie most economical and elllcient organization of the force necessary. This force, there estimated as low as one-firtleth (1-50) of our mercantile marine, or at about one'gun boatorsix hundred tons to sixty thousand tons of commerce, is less In the number of ships than that which we now have. l.enane Inland. Another point is the necessity of commencing at once to prepare our great fresh-water naval depot at that part of the Philadelphia station known as League Island. This is not only desirable in view of the present condition of the yard at Philadelphia, uut in leimereu necessary ny me present Char i,er and further necessities of the navy. Ships are, of course, better constrncted and equipped at large establishments, possessing com plete accommodations and facilities for the economi cal arrangement and application of material. The great defect in the situation of most of our yards is their want of land area and available water front sutllclent to do even their present work to ad vantage. This is particularly the case with that portion of the naval station at Philadelphia where the work is now done. The water front of the present working ground is so small that four ships can hardly lie there without being In the way of each other. Build ings and machinery of every description are cramped and crowded together, interfering with their proper use, causing great expense of both time and money, and, from the close proximity of workshops and in flammable material, exposing the whole to great risk. In case of fire nothing but the most favorable circumstances would prevent a general destruction of everything in the yard ; and great vigilance is re quired and constant expense incurred to guard against a general conflagration or houses, ships, and material. Moreover, this portion of the station Is situated In the midst of a great city, stopping its growth In one direction and interfering with Its Improvement, and Itself subjected to all the inconveniences incident to its position as an independent establishment iu tho midst of a municipality with adverse Interests and under different government. , l ike difficulties have been felt at the Brooklyn yard, but those at Philadelphia are much greater. These Inconveniences in the working of a station of such absolute importance as that of Philadelphia are most serious. They are great at all times aud they will be more severely felt as Iron comes, as must now bo the cose, to be more generally used as a material for naval construction. Iu view of the necessity of fresh water for their preservation, tha Philadelphia station is, for the repair aud ordinary" of iron ships of every class, far the best, if not the only practical one on the Atlantio coast. Situated on a great fresh water river, one hundred and twenty miles, oy its course, from the sea, in the heart of a populous country, at the great ventre of iron and coal, and with water sufficient for tha ill aught of the largest ships, it presents atonee every condition of convenience, economy, and defense. The only difficulty for the present and for the future is found in the size and situation of that part of the statiou which we aro now, for want of legisla tive iict ion, obliged to use ub tho working yard. I should not feel authorized to speak so strongly on tills subject were It not that we nowaotiallyowu, us a piirt of the same general station, this island, of tin area of six hundred (600) acres, between tha lines of mean low tide, cut off by navigable water from the main land, with a water front on the Dula waro alone of two and a hair (2) statute miles with a depth or water or thirty (30) feet, and wittl great natural facilities for basins and docks, enjoy ing all the advantages before enumerated, aud sub ject to none of the Inconveniences experienced at that portion of the station now In active nse. This position was approved by tho department after close Investigation by otllcers of every class mid tlie laud Itself, the gift of tho city of I'lUUdeU phla. purchased by her at great 'expense as a mea sure of relief to herself and to the Government wus given aud accepted Willi the idea of transfeirinir to that point all the naval operations or tho station. 'Ihls. tho department has been and is anxious to accomplish; but it needs an appropriation lor the preparation or the new yard, aud without tills It cannot move. In the meantime it wonld be foolish for the depart eut, even If it felt authorised, to expend money on iiermanent nnnrovement of ti.o .,..,..... r.,.. meu the t . ,i.u . , , . , , . I .. , ,.vd, ill. iTlFlLlllir jam uv 1 uiiKticiiniiu; uuu miming cau oe done either in the reauangeiuent of buildings for the providing of the improved touls and machinery proper for tha work required, " The auiiual expenses of this yard are, for these reasons and those before given, much Increased -and it Is not doubted that tlie savings from this soiree and from the expense now incurred ot maintaining
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